Corruption Stalks The Fifth Republic

April 6th, 2013
in Op Ed, syndication

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France is no stranger to political corruption scandals. They rumble on, a distant drum, one succeeding another, going from one political party to another and one government to another.

Some are about personal enrichment, but most involve misappropriation of public funds for party political purposes, or accepting illicit cash contributions for election campaigns, and others are related to alleged kickbacks on international defence contracts.

Some of them result in convictions, often a decade or more after the events concerned were first rumoured. Others never find their way into a court room, but continue to nourish the atmosphere of suspicion about politicians and everything to do with politics, or, as some commentators have been saying in recent days, gnawing at the very legitimacy of France's democratic institutions.

Follow up:

Jacques Chirac, president from 1995 to 2007, after completing his presidency received a two-year suspended prison sentence for misusing City Hall funds to give "fictive" jobs to political associates while he was mayor of Paris. Alain Juppe, his minister of finance, and later minister of foreign affairs under President Sarkozy, also received a suspended sentence in connection with the Paris City Hall case. President Sarkozy himself is now under investigation in connection with rumours that he accepted cash for his 2007 election campaign from the heiress to the multi-national L'Oreal cosmetics business, Liliane Bettencourt.

His former finance minister, now head of the IMF, Christine Lagarde, is under investigation for improperly influencing the outcome of an arbitration tribunal which ruled in favour of a former socialist minister from President Mitterand's period in office (and against the state) who was awarded €285.

Both Sarkozy and Lagarde vehemently deny any wrong doing.

But the case of Jerome Cahuzac, budget minister in the government of President Francois Hollande until March 19, is regarded as the most devastating to hit the Fifth Republic, founded by Charles de Gaulle in 1958.

Cahuzac, whose ministerial remit including combating tax fraud, confessed on April 2 that he had had a bank account in a Swiss bank with €600,000 in it, later transferred to a Singapore account, making him a tax fraudulent tax minister.

On December 4 last year a relatively new Internet investigative journalism site, Mediapart, founded by a former Le Monde journalist, Edwy Pleynel, reported the existence of a recording of a 2002 phone conversation in which Cahuzac referred to a Swiss bank account. In March, technical experts concluded that the voice probably was that of Cahuzac.

Not me, said Cahuzac, who flatly denied to the president, the prime minister, the National Assembly, and, of course, the media, that he had ever had a Swiss bank account.

A banal case of tax fraud, which which Cahuzac has now been charged and risks a maximum prison sentence of five year when the final verdict is delivered? That is not the way it is seen by the French, its politicians, the media or the people on the street.

The question now is who knew what and when, and was there a cover up, deliberately or by accidental incompetence. As Le Monde's editorial on April 3 said of President Hollande :

"In the eyes of the French, either he is naive or incompetent or he more or less covered up the lie. In either case the fault was a serious one."

The offence, which ever it may be, becomes all the more serious to because he solemnly promised when he came to power last May that under him no one would ever be able to put a finger on the honesty and integrity of the Fifth Republic.

No one believes that Francois Hollande is dishonest where matters of money are concerned, but as a respected figure on the Paris literary scene and member of the Academy Francaise, Jean d'Ormesson, said in a newspaper interview earlier this year, "He does not lie, but agrees with everyone."

In his political discourse, the president has a manner of not saying bluntly and unambiguously what he thinks, but says things obliquely, leaving the listener to tease out the real meaning.

It appears to be a habit he learnt in his 11 years as secretary general (not "the leader") of the Socialist Party, where not saying what he thought was essential to avoid rousing the hackles of one or other of the party's numerous factions and to preserve a semblance of unity to the rest of the world.

His finance minister, Pierre Mosovici, in whose ministry Cahuzac was a junior minister, is also under attack for showing undue complacency when faced with the rumours that began four months ago.

Le Monde's lead story on April 4 opened with this sally:

"Bercy (the Finance Ministry) and Beauvau (the Ministry of the Interior), how could they not know? 'The rumours about the person of Jerome Cahuzac have been so insistent for so many years that frankly one must doubt it', according to a former official of the Finance Ministry."

Le Monde notes than an opponent of Cahuzac in local government politics told Agence France Press, the French national and international news agency, that an agent of the French Customs Board had identified the Swiss bank account in 2008, adding that a senior member of Nicolas Sarkozy's presidential staff, Claude Gueant, has said that he does not doubt that this information would have been passed on to the present minister of the interior, Manuel Valls, very soon after he took office.

In other words, Chuzac should never have slipped through the net when Hollande vetted the nominations for posts in the government of Prime Minister Jean-Marc Ayrault and Moscovici should have acted much earlier and more effectively to protect his ministry from the scandal.

This is easy to conclude after the event, and difficult to make a convincing defence, given that ignorance is not a defence that any one is ready to accept.

Some of President Hollande's opponents in the opposition parties, notably Marine Le Pen, leader of the populist far-right National Front, are calling for him to dissolve the National Assembly and call a general election, which would probably leave him as a lame duck president with non-socialist prime minister running the country.

He is unlikely to do that, and it is unlikely, unless new damaging revelations come to light, that the socialist government can be defeated on a vote of confidence in the National Assembly.

The Socialist Party has an absolute majority of 293 in the 577 member house. Only defections by members of the Socialist Party itself could bring down the government. Normally the Socialist Party can also count on the support of another 32 members of extreme left wing and ecologist groups.

Whether or not the domestic snowball continues to accumulate dirt, the Cahuzac scandal seems to be snowballing into an international affair, in which the first demands are that Switzerland should drop its bank secrecy laws, and Singapore too.

The pot is being stirred by revelations on April 4 in the international media, including the The Guardian and Le Monde, of a list of 1,000 persons owning companies or parts of companies in the British Virgin Islands, well known as a tax haven.

One of those listed was in charge of finances during Francois Hollande's presidential bid last year:

"Jean-Jacques Augier, a publisher who studied with the Socialist president at the elite ENA management school ..... Augier, 59, who once worked as an inspector of finances in France, confirmed the investments and said nothing was illegal."

Not illegal, perhaps, but in a world in which the very rich - many of them having acquired their riches by working in the finance industry - anyone who is very rich is now regarded, with or without foundation, as "suspect", and the same applies to any one with shares in a company in a tax haven such as the Virgin Islands.

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